Adjusting journal entry help plssss.

[angelic8]

Q1.

On Nov 26 2010, a client paid $20,000 for a service to be performed at a later date in Feb 2011. The previous accountant recorded this transaction as
Dr Cash $20,000
Cr Revenue $20,000

What is the adjusting journal entry?

Q2.
On 31 December 2010, GHI Ltd bought an item of equipment worth $75,000 at a cost of $50,000 (Assume this equipment has been fully paid for). The previous accountant recorded this transaction as: Dr Equipment $75,000 Cr Cash $50,000 Cr Revenue $25,000

What is the adjusting journal entry?

 

[ColinCPA]

Hint:

Figure out what the journal entry should be, draw some t-accounts, and adjust to the correct balances.

 

[Ameen Ahmed]

Q1 Prepaid expense----20,000 (dr)
Revenue----------------20,000 (dr)
Cash----------------------------40,000 (cr)

Q2 revenue---- 25,000 (dr)
equipment-----25,000(cr)

If it helps join the my page with the name Ameen Ahmed for future help thanks